The self-interest model predicts that the outcome of the "ultimatum bargaining game" in which the allocator starts with $20 is that
A)The allocator will offer the receiver $10 and keep $10 for himself
B)The allocator will offer the receiver $0.01 and will propose to keep $19.99 for himself
C)The receiver will always reject the allocator's proposal
D)The allocator will always keep the full $20

Question

Quizplus · Accepted Answer

According to the self-interest model, the allocator will try to keep as much money as possible for themselves while still ensuring that the receiver accepts the offer. Offering $0.01 to the receiver will increase the likelihood of the receiver accepting the offer, as even a small amount (less than 5% of the total) is still better than nothing. This strategy allows the allocator to keep the majority of the money for themselves, maximizing their self-interest.

The Self-Interest Model Predicts That the Outcome of the "Ultimatum